BXG - Earnings call transcript Q4 2018 | Bluegreen Vacations Corp

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Operator

Good morning, everyone. Thank you for joining us today to review Bluegreen Vacation’s Fourth Quarter 2018 Financial and Operating Results. Today’s business update will be presented by Bluegreen Vacation’s Chief Executive Officer, Shawn Pearson; and Chief Financial Officer, Tony Puleo. I would like to remind listeners that this pre-recorded business update may contain forward-looking statements based largely on current expectations of Bluegreen Vacations that involve a number of risks and uncertainties. All opinions, forecasts, projections, future plans or other statements, other than statements of historical fact, are forward-looking statements. assurance expectations no be prove give correct. can that will such to We or materially are, are could expressed, results, based control. uncertainties achievements Actual performance, to subject differ instances, number risks by change beyond forward-looking that Company’s are a factors or these from many statements to and which subject on of and in implied contemplated, those the implement without relationships its uncertainties include, increase limitation, anticipated successfully with ability strategic and with and Company’s risks earnings Risks the generate and its partners to growth, and currently plans, associated long-term value. shareholder

and are Bluegreen is XXXX Vacation’s on be available ended risks December detailed on or to Bluegreen the Additional year Form and will SEC’s which XXXX, on uncertainties X, expected Vacation’s on Annual March view Report and XX, the website, to be in www.sec.gov, for website, XX-K www.bluegreenvacations.com. filed described about

not Shawn We undue we Officer. statement, have on date supplementary Listeners available that I’ll a factors are turn of as statement. Vacations website. any should update made. slide over specifically or on obligation, is Executive exclusive, which the the Bluegreen reliance cautions earnings deck also speaks only provided not any place our supplement forward-looking which and do not call now the Pearson, disclaim foregoing Chief any to undertake, to Shawn? forward-looking

Shawn Pearson

not said, focused benefit investments. results quarter, to platform remained growth. our the quarter initiatives that of however, and fourth infrastructure Bluegreen and longer-term we planning, fiscal executing XXXX the do for In for long-term you to review today these results. the us our sustained our quarter Thank fourth as joining developing With reflect enhance year support on on and

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of Hurricanes addition, ultimately reduced the In our reservations, travel sales. XXXX which therefore and results on Michael and the Florence impact lingering also reflect tours

have it we strategic the marketing While will and channels, sales pursuing confident digital identifying to our we over drive are Rhodes which of pursuing respect is of can vacation we initiatives, capabilities ways facilitate marketing we that a longer-term. growth our and expanded will to purchase expect self-service under reaccelerate are number growth, who the our of leadership With take time that our packages. we the activation Famous

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in have the the result activation about we latter of to excited with positive expect an packages VOI XXXX. usage see digital we very ability which vacation to in our and it believe provide sales, in of the the impact are rates can being We increase half increasing

over community, partnership which members. increased has Our into XX Privileges continues access Choice support Loyalty to with Program Choice million the

to a featured ours. the We webpage, part the Choice Privileges Bluegreen’s Choice of linked travelers from seamless webpage are webpage, now as is to which transition allowing

call Collection brand, volume vacation soft our inquiring XX under potential offering. reach. Choice to branded have for of is about impact excited we program Choice’s we aspirational, ability marketing ownership Choice the of our We resorts the Bluegreen partner our long-term are are Privileges about and on accelerating Ascend and the upscale official very Choice, their broaden

also toward of training Choice processes center capitalizing our with and additional We’re a volume view this on call on leads. in working improvements

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remain that no optimistic we resolution that a be of achieve there the reached, will resolution While we assurance a will is issues. outstanding

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efficient purchase industry that buyer cases the desire Should vacation is purchase As and original reason, a historically price is any product by difficult. their in owe for timeshare sell there interest factors in VOI. ownership made have they their vacation portion a market no purchase and in of still the purchased buyer. is common the financed of perpetuity, to issue you is this know, secondary the may These a exiting most the

vacation of their time this situation on owner will of ownership to their releasing these method merely from making on taking obligations firms the could their consumers, own. the obtained solely The letters. service firm Some valid own their the release default stop based abusing by exorbitant the this up-front no purchase. are are & a their called obligation They In on fees, consumers’ their on fees tying the owners them from at capitalized for firms their company’s third-party exit obtain resulting promising released no a is have hands the do for have from cease they their by result to talking on the about so reality, obligations consumer their the from customer large, for use legally situation. same and loan, and harming Ultimately, have payments while instructing desist the contractual credit. provides that

from in of our the continuing strategies to Tony legal to past, As continue developing exit partnering results to the side, and we with ways firms. Under on the focused desist Rhodes, impact find Osa de have of the to directly the those our VOI address we are la & and shared Jorge our owners protect impact leadership members this Famous negatively while activities on peers. new cease the needs of predatory our of Puleo

launched of suit volume cease their law the affiliates. & firms On and law against we have legal a one the side, desist high

third-party we’ve general’s addition, abusive attorney the about and of the the owners, to of been of In Resort Development lawmakers states’ American efforts firms. supportive educate timeshare behavior Association the

denying better the the for firm thus website, agreements terminating to who they services reevaluate highlighting general are owners campaigns, third-party to desist to getting success firms. by the the directly. with participating owners no would of our of and so served providing the firms will intend digital our deceptive & more them exit by We third-party and these also with defaulting are allow own channels third-party of effort before we to Responsible signed We their & on sign us up us be ARDA’s desist cease ownership their talk through contract timeshare third-party Exit talking owner about firms Coalition cease which have firms, with who along called no owners out believe a to practice that

programs than to extra there their to get Vacation them, over using engaging through We navigate in available ownership. to the or options can a these need Finally, many If of owner great our them that they so rather vacation who course owners, owners help by sometimes vacations desires to but of out exchange one will to third really through options their our exit, the way more Club a may in outreach, have we we internal outreach partners, of are XX vacation. the much party. XX,XXX getting this to in believe developed believe that need determine a enhance intend awaiting that either protocols be resorts we take beneficial we an our all points help owners help Bluegreen

We progress. will keep of you apprised our

sales journey, ahead experiences. enhance package beyond, move sales, both importantly vacation consumer all we points, improving vacation marketing most we focused laser VOI As touch the on through the are XXXX and which and should owners’

to optionality and pursue accretive generates provides model, the capital-light cash which sheet with balance stability free We recurring that business have a flow and initiatives. Company growth a both strong

that confident fourth will a are laying look detailed to-date We are year. review of provide for our you to firm Bluegreen quarter our progress foundation we throughout on and forward a Tony our actions Tony? results. updating year-end and the now

Tony Puleo

Shawn. and remarks financial Thanks, review today a include My our will and full year fourth results. quarter operating of

some like VOI the results, between tours. as and driven million as VOIs a $X financial in I’d quarter our to discussing Before were X% by sales decrease or existing for in provide quarter X% year, marketing mix and year-over-year, new color of customers. the well fourth down on the sales sales System-wide

our this from the million fourth third of on travel lingering call, impact of was approximately cancelations we hurricane due third quarter quarter mentioned $X.X quarter activity. As to earnings decrease

was that mix believe we in quarter, only program, tours of a due yield improvement which in only decline per volume mentioned, sales marketing the sales to tours owners down tours. sales sales our a offsetting tours. per our for therefore to XX% sales guest resulted Shawn the X% sales by existing remaining the X% on Drilling management a the increase in decrease in fourth fourth offset partially to in such effects guest decrease in of in associated As X% likely volume to quarter, the increased owner in

to system-wide were compared XXXX. X% VOI sales up For the as ended year XXXX,

in due beneficial. well purchase lower In sales XXXX. The in more Bass in new We per For existing Pro. owners particular as due the marketing sales sales, existing decline decision new XXXX, that program In our was growth in process recent right in to XXXX over Pro changes from and Bass marketing in net system-wide be owner channel a to $XX,XXX grow were a to customer yield sales primarily offset generated to in mix program. by is we as a still meaningful our business of yield tours, up our slightly strongly the show to XX% VPG. X% We shift towards approximately issues up X% will X% to our disappointed was this initiatives marketing XXXX, increase management to of that new package, more increase our owner sales with Despite driven X%. believe the of XX% decrease more guest. X% and increase in vacation long-term feel income partially ongoing a new sales the volume household owner to in continue which delay by to sales, increase the customer as of to sales Sales minimum we owner growth customers, driven an to in will time progress. roughly from the new will take anticipate customers XX% by a to year, a $XX,XXX qualify comprised the of management tours, sales declined increase the

also further destinations. As Pro we with resolved, for Bass channels opening be issues believe Shawn the our marketing that will mentioned, vacation

However, time lead execute will a from resolution perspective. any such to require growth

We any also expect be western expansion time. strategically and Cabela’s Bass rolled would Pro through out over that

$XX.X net financial quarter in $XX.X XXXX on for per fully fourth of XXXX. share diluted compared $X.XX fourth was per results, to net share fully diluted the or income of $X.XX of million Moving our income to or the million quarter

by $XX.X Jobs Adjusted As included benefit Cuts a XXXX. XXXX a fourth quarter. $XX.X an and a for reduced EBITDA change of in of almost for reflect from the in XXXX. versus EBITDA for earlier, which in tax result and year in provision our estimate provision reminder, deferred sales the loan which liabilities quarter change in in were was We XX% periods’ to the decline gross the million a tax growing million, XX% on increase XXXX. desist estimate $X.X an prior the of defaults increased from and as discussed Tax income Act of adjusted This profit year. was to activity, in VOIs in down the of driven originations sales of prior on prior X% approximately in XX% X% compared quarter sales loan the change decline the The losses in QX increased fourth the cease losses reflects XXXX including VOIs million to

impact will loss not of benefit outlined provisions decline earlier, we sales we was lower the of that Cost expect As basis increases. however most $X.X strategies implement for over likely quarter some adjustment be in summer would million price of time, fourth GAAP the XXX by of Shawn to the in $X.X or XXXX. late points the loan seen these reflecting a strategies favorable of million

and rose information interest connection strategy well due the million legal fell realignment to impact debt with payment an as legal of $X the Eilan increased good employs increase as primarily a was Hotel quarter our lower with certain aggressive increased to corporate corporate cost $XXX in expenses was & sales the as well XXXX associated acquisition and with severance market rates. the carrying corporate the additional increase which our investments. quarter, due due overall acquisition in $X.X net XXXX a technology Spa marketing X% The to associated costs costs realignment to accrued sales, initiative, initiative. primarily in to of by an Bass Antonio, Elian the as Interest of million, more million to fourth Our inventory Pro million the overhead and eliminated of of expense related operations. Texas. SG&A our the in San fixed $X.X as offset This of increased in $X.X Company variable reduction the by depreciation reflecting lower as in the faith included million Shops of remainder

and will sales, as and in Management and Resort X% and We that well investor in corporate third sales. as investments, to costs. legal in a a in operating and some increase point decrease discussed increase percentage million the by income increased profits of $XX.X pre-tax healthcare the to more public recognized the Now, attributable in or primarily compression increase is in and interest as positive on higher discussed. profit due XXXX costs increase by driven was information relations provision were XX% as results, compared as variance fully Eilan year tax anticipate for $XX.X XXXX. to of being $X.X associated in carry technology growth along The net continue Act an the income an was in $X.XX Income with margins, on to loan I public of to the of system-wide prior turning XX% additional year a experienced at for an costs, as to of overhead, with company, expanded XXXX million expenses team, Tax provision connection a $X.XX XXXX XXXX $XXX the before carrying share. cost the resort; $XX XXXX diluted decrease income to full losses versus per sold higher non-controlling income per our sales share million in as with million our XXXX quarter of the decline were a XXX-basis the to in in higher this slower executive in expense earnings benefit Net marketing or X% previously our costs system-wide ended VOIs higher net a partially of Operations for call. compared impacts income in of X% drivers X% well in the from million These million XXXX; as the of XX% Club offset XXXX, of tax year; inventory, related primarily depreciation for $XXX costs cost main decreases compared increase selling The

full of as of ahead Early of showing a resolution, leading and shared. a centers business year Pro with number various built optimism Shawn balance comfortably we weather some sense are fund new However, our of business to and plan we closer a to cycles destinations $X.X from year-end, contribution of to a sheet and the improvement, is in with believe The receivable-backed arise. well as a our availability and we facilities, excluding payable. cash, which with million they $XXX times, will sales Bluegreen’s can unrestricted we facilities. which terms have assets balance us million indicators under growing and are that funded At Bass look sheet the take was net allow credit of collateral billion $XXX.X in advantage was notes low available a EBITDA debt subject X.XX very of $XXX million to to opportunities Company’s

share an from and the a declared for X, XX% time directors dividend other cash December over securitization Through During XX, $XXX the repurchased factors. Subsequent of on high share ownership-backed approved January board was per conditions fourth shares. the repurchase of The and completed of XXXX. Board common to $X.XX approximately oversubscribed. Company million The Also program times $X demand end, fixed shares vacation in with of of market investment-grade dividend $XX for XXXX, a shares rate a multiple XXX,XXX Bluegreen million fourth X.XX%. to Bluegreen total X,XXX,XXX quarter, million. stock authorization securitization repurchase increase annualized of regulatory quarter, allows representing we the interest up notes of has for a Directors to over our time to subject the in quarter to a

footing. on started XXXX have As earlier, Shawn stated strong we

and on XXXX sharing laid move highly progress efforts with believe we in to you will bear as an focused scale infrastructure look forward We we our to and the the the foundation that We The can of team in is half support our quarters results, have for forward. latter upon ahead. that start improving fruit increased XXXX. growth

Bluegreen Vacations (BXG) 22 Feb 192018 Q4 Earnings call transcript